Career CFO vents her frustration over business, human capital, economics, social environment, culture, politics, and everything else; but always with a monetary twist

September 2010 posts

September 30, 2010

Even though the topic of this AOL News Article Iran's 'Blogfather' Sentenced to Long Prison Term is not related to the topics of CFOs and Controllers' frustrations, it is related to the freedom of expression issues that concern all of us. That is why it should have its place in the spotlight here.

I don't want to diminish the severity of the sentence and the horror of what Mr. Derakhshan is going through in Iran as the result of expressing his thoughts and opinions in cyberspace. However, essentially everyone who publishes honest and edgy, or even boring and banal, material on internet are exposed to unpredictable consequences.

In one article, or post, or conversation after another, we are warned that prospective and current employers are searching internet for possible controversial material on you. So do the political opponents, educational institutions, investors, country clubs, religious congregations, etc, etc. Here is a typical example of such warning provided by the CEO of TheLadders.com Marc Cenedella in his new book "You're Better Than Your Job Search": In a Google World, Prepare to Be Investigated. Jail sentences in foreign countries are extreme and rare incidents, but we do learn that people get fired, rejected and harassed because they express themselves.

That is the reason so many bloggers are writing under noms de plume. That is the reason so many people who have something to say don't write at all. That is the reason I guarantee 100% anonymity to anyone who shares their professional experiences with me.

And it does not apply just to cyberspace. One of my future planned posts will address my favorite topic - something I call the Bill of Rights in the Workplace. There is a reason the new great American masterpiece from Jonathan Franzen is called "Freedom." Obviously, it is a concern.

And of course, I disagree with Mr. Derakhshan's politics. Moreover, I am a life-time student of World History and it seems inconceivable to me that any private citizen without diplomatic immunity would actually accept an invitation from any organization sponsored by an authoritarian government. History is full of actual repatriation incidents that sound like horror stories: China, Russia, etc.

Nevertheless, my disagreement with his ideas, does not mean that I will not support this writer's freedom of expressing them with all my heart. It's like what Voltaire said, "I may disagree with what you have to say, but I shall defend to the death your right to say it."

September 28, 2010

My very first post CFO's and Controllers' Many Hats addressed (in two parts, as the matter of fact) the inescapable issue of overwhelming span of functional control tackled by all financial execs. The issue has been described as a major source of both frustration and pride.

Well, whether you are proud or not of being a natural choice for a million of high-level responsibilities, keeping all balls in the air is a managerial skill mandatory not only for your professional success, but for taming the frustration as well.

Both mathematical rules of optimization and circus performances teach us that there is a limit to the number of items you can juggle at the same time without dropping them. This is why Prioritization and Delegation are two most important organizational tools for a Controller or CFO.

Let me share with you my own Top Three Rules for each of these tools.

Prioritization:

Rule #1. Assign priority scores to each task. Let's say, 1 to 10 with one being the lowest. The highest priority on your list should always be given to the task that in a long run will benefit the bottom line the most. For example, writing an angry answer to your boss's email asking whether you are busy right now has lower priority (I would say, 2) than looking at your cash position and deciding whether you need to use your credit line or cash availability to finance today's operational expenses (definitely a 10).

Rule #2. As much as you can, try to block certain time periods with periodic tasks of high priority in advance. There are such things as SEC reports, monthly budgets, weekly cash flow projections, etc. etc. that occur periodically. Prevent yourself from cramming at the last moment by assigning priority scores and scheduling these tasks ahead of time.

Rule #3. If you work in a privately held business (and most small and mid-size companies are) and report directly to the Owner/President/CEO, be ready to push his/hers priority higher up on your list. I know it sounds almost psychotic, but being flexible when it comes to your boss's requests sometimes can save you the boatload of frustration. However, it does not mean that you have to drop everything and attend to his needs. Many people make that mistake. Instead, you need to provide him with reasonable time frame and explain why the task at hand is more important for HIS BUSINESS. I will get back to the issue of flexibility in scheduling discussion.

Delegation:

Rule #1.Don't be afraid to delegate important functions to capable subordinates because you are afraid that they will undercut you. First of all, if you are a good match for your position and do your job to the best of your abilities, you should be confident. Secondly, by overwhelming yourself with extra tasks you diminish your own efficiency and undermine yourself.

Rule #2.NEVER do your subordinate's job because you believe that you can do it faster and better. This is a bad mistake many of us make. When we do that, we damage ourselves in two ways: by wasting our own valuable time and by not letting our subordinates to improve and develop.

Rule #3.Always make time for training and advancement of your subordinates. By building strong and reliable accounting/finance staff you better your own chances for success .

Honestly, it took me a while to develop and even longer to start implementing these rules, but I can vouch for their effectiveness.

September 24, 2010

Over a month ago, in my post Your Boss: Value & Madness of an Entrepreneur I wrote about quirkiness and impatience of people who have brilliance to come up with original start-up ideas and guts to build a company from scratch - people who provide us, CFO's and Controllers, with new job opportunities beyond "Big Business."

I also discussed how their peculiar and difficult qualities are the main source of our frustrations. I called the sum of these character traits the Entrepreneurial Bug.

As if to support my point of view, September 18th issue of New York Times featured this article in their Business Day section - Just Manic Enough: Seeking Perfect Entrepreneurs by David Segal. I highly recommend that everyone interested in the subject of entrepreneurship, start-ups and venture capital investment should read it.

Of course, my own primary interest was the excursion into psychology of the indicators so characteristic of our bosses difficult behavior. Needless to say, the article confirms that not every subject is afflicted with the entire spectrum of symptoms and displays them with the same intensity. Nevertheless, the author clearly states that only "a thin line separates" an entrepreneur from a psychiatric candidate with a hypomanic syndrome.

One of the article's subjects, Seth Priebatsch, echoes my post from 08/19/2010, when he "describes anything that distracts him... even for minutes, as 'evil.'" No surprise here - I've heard this before many-many times from various CEO's. The difficulties of working with people like that on daily basis, especially for CFO's and Controllers, whose job is to keep businesses in order and under control, is basically one of the main themes of this blog.

Mr. Segal goes out of his way explaining that the degree of craziness is what matters: some Venture Capital firms give personality tests to their prospects in order to determine if they are not completely bonkers. But I couldn't help myself thinking that these tests may be also designed to weed out people who are not crazy enough to be satisfactory material for future transition from idea generators into screw tighteners.

Strangely enough, the New York Times' confirmation that my extrapolation of personal experience dealing with business owners to the rest of the entrepreneurial world is completely justified, did not bring any intellectual satisfaction. It's kind of discouraging that if you choose to build your career in dynamic growing businesses, you will always have to deal with bosses who cannot help themselves not to be assholes.

September 21, 2010

Some people are born with incredible natural aptitude for managing people. Many years ago I observed a girl on a playground. She was about 5 years old playing with a group of children the same age. At one point some play rules, or another important issue, needed to be established, and I was amazed not only by the assertion of authority, but also by the uncanny logic exhibited by this extraordinary little person. She started with a commanding, "Children, listen to me!" and continued laying out a proposal that nobody has any inclination to dispute. I remember thinking to myself, "That's a naturally born leader!"

Unfortunately, people like that constitute a small percentage of general population and, strangely enough, they are even rarer among business owners. Just because someone had a great idea and entrepreneurial drive to establish their own business doesn't mean that they also have sufficient managerial aptitude. Only few of them had formal business management education and most of them never worked for anybody else long enough to gain on-the-job expertise.

This pretty much leaves their leadership skills at intuitive level at best. And if the sixth sense fails them... well, all kind of sad things occur: they cannot see the difference between a pompous phony with an impressive voice spewing well formulated lies and genuinely knowledgeable, but quiet workaholic; they have very little or no understanding of delegation of duties; frequently they cannot even figure out their own roles in the company.

The most common executive management conundrum such Presidents/CEO's (especially first generation of business ownership) encounter after the enterprise reaches the "established" stage of development can be described as follows. Their entrepreneurial talents draw their minds to further commercial improvements, to generation of new ideas that will help to expand and strengthen the business. At the same time, the wonderful feeling of accomplishment plays dirty tricks on them: subconsciously they want to rest on their laurels - they feel that they deserve to work less, to take summers off, etc. etc. Moreover, since the business is their child that they have born and reared applying their own talents and titanic efforts, they have incredible aversion to the idea of letting other people to completely take over vital tasks of the company's ongoing functionality and maintenance.

(Side note: I am really tempted to state here that the majority of them are control freaks. However, I don't have scientific evidence for that, just my own and my colleagues experience. More importantly, it does not make a difference, both obsessive and perfectly balanced CEO's display the same symptoms.)

You have to agree that this position is absolutely psychotic. What do they do? They resort to their favorite style of management - what I personally coined several years ago as "Hands-Off Micromanagement."

Let me show with this example how this control style may manifest itself. On one hand, the CEO can completely forget that you are working on establishing a $10 million credit line with a new bank, or that you have just upgraded your accounting system to a new version that basically made the entire budgeting function automatic. But on the other hand, he keeps asking without a fail every month why the Federal Express bill is $2,000 - when he was starting the business it was never more than $100.

I am sure a lot of my fellow CFO's and Controllers have recognized the disease as they have to deal with it and the frustration it causes on daily basis.

September 16, 2010

You worked real hard day in and day out. You applied yourself to the very best of your abilities. Finally, you have reached the senior/executive management position. Now, you are the CFO, the Controller, the Director, "the right hand," "the most important person in the company without the title" - it doesn't matter what they call you: you've achieved it. And it's irrelevant that the business is small - in this small pond you are a big fish.Does this mean that now you can tell your boss, the owner of the company, to stop watching porn on your computer after work and leave it on overnight? Even my favorite columnist Randy Cohen, cannot give you a clear answer in his response to one of our peers' query in June 27th New York Times Magazine - The Ethicist: Porn in the Office.He is trying, though: yes, it is not right that the boss doesn't close the browser, that he leaves it for the next user to see, but he doesn't really do anything illegal either, etc, etc, blah, blah, blah...

The point is that our dear entrepreneurs do not separate themselves from their businesses. They treat their place of work as their second home: watching porn, meeting with their friends, letting their kids and pets run around. This could be a $200 million business you helped to build, but THEY REALLY DON'T CARE WHAT ANYBODY THINKS. It wouldn't even come to their minds to consider the possibility that somebody may be offended, or simply surprised, by the images on the computer screen. And it is not about porn. It's one thing today and another tomorrow - the principal (pun is always intended) attitude is always the same.

And the unfortunate truth is that no matter how important you are to the company, you cannot criticize them, because they will never forget it. They will hold the grudge forever, because subconsciously they feel that they are untouchable royalty in their little kingdoms and NOBODY dares to point out their shortcomings. And if you are experienced and shrewd enough, you will not say a boo (neither would I).

So, here you are, frustrated out of your mind by the unbalance between your professional achievements and organizational position on one side and inability to exercise your personal freedom on the other. All I can advise you to do at this point is to pick your favorite from my list of coping devices listed in One CFO's Personal Tools for Frustration Relief. That's all you can do.

September 14, 2010

All CFOs, Controllers, VP Finance and Financial Directors, especially in small businesses, are involved in recruiting process. Most of them don't have in-house recruiters and nowadays not too many businesses can afford $25,000-$30,000 headhunters fees. So, with hiring on one side and testing the market (or in the current economy actively looking) for themselves on the other (plus payroll, benefits, etc. management), their involvement with HR is pretty significant.

However, because they don't work for businesses with thousands of employees and are not professional recruiters, small and mid-size financial execs are not necessarily up to date on the talent-searching technology. While going through hiring process they are still printing resumes, looking through them manually ... - you know the process. And when the tables turn around and some of these execs are forced to search for new employment themselves, they expect their resumes to receive the same treatment even if they apply for a job in a larger company with its own in-house HR department or reply to a recruitment agency's (such as Robert Half, Michael Page, Source Associates, Forum Group, etc.) ad.

How could they possibly know, especially if they have been off the market themselves for several years, that today large HR department and recruitment agencies work with automated Applicant Tracking Systems (ATS) - software that in its sophistication goes beyond database matching and usually employs cutting edge data-warehousing technologies?

I know plenty of financial execs who are so proud (rightfully so) of their accomplishments they don't even bother adapting their resumes to the nuances of advertised job requirements and keep sending them out "as is" regardless of the recipients specifications.

Please, do yourself a favor and read this recent article from TheLadders The 24-Step Modern Resume. Not only it is incredibly valuable on its own (an eye-opener for uninitiated, really), but in the text you will find links leading to further details and related subjects.

September 09, 2010

I am really anxious to move away from abstract discussions on the nature of stress we experience every day and start showcasing stressful incidents and frustrating professional issues near and dear to every CFO, Controller, etc. However, before I do that I feel we need to address one more theoretical subject - correlation of Frustration and Anxiety.

As I already mentioned several times, frustration is a normal reaction (whether extra- on introverted) to situations in which we face obstacles to our achieving goals or actions that contradict our standards, etc. Every person experiences it from the moment he or she is born. In this blog, with examples from daily war of survival, I argue that my peers, CFOs, Controllers, and other financial execs in entrepreneurial environment, operate in a state of chronic frustration.

Anxiety, on the other hand, no matter how many scientific definitions are out there, boils down to sense and fear of danger, whether real or non-existent. The symptoms and sensations are the same if you are genetically predisposed ("wired") for anxiety or forced into it through the lifetime of conditioning.

Because it is far more fascinating to try to explain why some people feel anxiety and panic attacks for no tangible reasons at all, cognitive science is primarily preoccupied with the types of anxiety that are caused by chemical imbalance, hereditary factors, etc. If you are interested to learn more about the latest research advancement in this area, I particularly recommend an almost a year old, but still very accurate and exhaustive, New York Times Magazine article Understanding the Anxious Mind.

And, of course, most of us belong to the army of Americans (tens of millions of people, actually) who are worried about the economy, their job security, the money they lost in various market shakeups, the environment, the future of their children, etc. etc. Economic and environmental issues are big reasons why so many people seem to be on the verge of a breakdown.

That said, in the context of this blog I am primarily interested in the undeniable fact that chronic frustration with your job leads to stress and acute anxiety. Just like Pavlov's dogs we are conditioned by frustration to fear those situations that cause the unpleasant experience.

We try to accomplish a particular task, meet our regular obstacles (bosses interventions, subordinates incompetence, time constraints), fail to achieve our goal, get frustrated - and (surprise-surprise), now we feel anxious every time we start that task, because subconsciously we anticipate frustration and fear the pain. The anxieties accumulate into stress, and now we feel trapped. If the situation is not managed, we can spin out of control.

And that is why it is so important to find methods of releasing frustration out of your system (please see my post One CFO's Personal Tools for Frustration Relief) and, just equally important, find resolutions for your professional problems by elevating your managerial, organizational, behavioral and technical skills - issues I hope to discuss in the future based on the incidents from your professional life.

September 07, 2010

The US Open, tennis's most visited Grand Slam, is in its second week now and I cannot pass on the opportunity to pay homage to my favorite Champion. He had never had anything to do with the financial profession (even though he possesses remarkable financial savvy that allowed him to preserve and expand his wealth), but what fits him perfectly into this blog's context is his special relationship with Frustration.

I am talking, of course, about John McEnroe. The majority of his critics wrote off his tantrums, consistently displayed on and off the court, as uncontrolled bad temper. As if he just had bad manners and didn't know how to carry himself properly in accordance with the "proper" police.

The truth is that the great tennis misbehaving hero has an incredible sense of what's right and what's not. He gets frustrated when things are not the way they are supposed to be. And, as we discussed before, in What is Frustration? , that's a normal reaction.

If you recall, his most famous outbursts were never random - they were directed at chair umpires' questionable calls, rude audiences, trash-talking opponents, his own errors, etc. Unfortunately, he didn't have an ability to keep it inside until the end of the match and then let it out some place private (like I advise you, or like Roger Federer does). Instead......

Talking about the frustration release... However, he also capitalized on his frustration. He elevated his game and thus silenced and destroyed his critics, he created shots still remembered by connoisseurs, he won 7 Grand Slams and ranked Number One in the World.

The reason to address the problems that we face everyday in our working environment is not just to release our frustrations, but to to be able to get over them, to continue doing your job the best you can, to carry on.